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Whitechurch Securities managing director Gavin Haynes says: “There had been so many leaks it was a bit of an anti-climax.”

Haynes says the Chancellor has attempted to take a balanced approach over the long term as “what he is giving away in the short term he is looking to take back in the long term”.

The most eye catching initiatives were the heavily trailed measures to reduce VAT by 2.5 percentage points to 15 per cent and increase income tax for earnings over £150,000 up to 45 per cent from April 2011.

Syndaxi Financial Planning managing director Robert Reid says the PBR changes open opportunities in some area, particularly in revisiting salary sacrifice schemes, but says overall the PBR has not been particularly positive for IFA clients: “An average IFA client is not going to be that much better off and could be worse off so there is an opportunity for good quality financial planning.”

According to Haynes, many of the Chancellor’s other initiatives, such as increases in tax credits and alterations to were targeted at lower earners and will not have an impact on many clients.

Reid agrees and says the Chancellor has been careful to aim his fiscal measures at those most likely to spend the extra cash: “The money has been targeted at those less able to keep it in their pockets and those most likely to spend.”

Although the Chancellor was keen to make some measures felt by the beneficiaries immediately it is some of the longer term measures that may have the most opportunities for IFAs.

AWD Chase de Vere head of research Cliff Husband says the increase in income tax for higher rate earners presents opportunities as does the Chancellors £3bn public spending programme: “The proposals will only come into effect after the next general election as there is a pledge not to increase income tax this term but this gives people plenty of time to plan for any changes. Pension planning should be given serious consideration to lessen the impact of any tax increases and for those willing to take the risk, there are always VCT and EIS investments offering 20 per cent and 30 per cent income tax relief respectively.

“With all the doom and gloom in the investment world, one area that may benefit from the chancellors actions is infrastructure funds. With the announcement that many major public spending projects, from road building to new schools, will be brought forward, the outlook for infrastructure could look very promising.”

But while there may be opportunities for IFAs, Whitechurch Securities chairman Kean Seagar says the proposals will not do anything for their stated aim of reducing the time and severity of a recession.

Seagar says: “The problem is that sentiment is not only a real force in the markets it is a real force within the general economy and sentiment has tanked. Consumers have for years converted higher property prices into loans and hence into purchases. Now, however, property prices are going the other way and people are very, very worried about the debt positions they have built up. Not only that but we are all now expecting unemployment to increase next year. So lower VAT etc. will not boost sales and more money in the pocket will go towards reducing debt/increasing rainy-day reserves.

“I believe that they only cure will simply be time. When we have had a recession for a reasonable period people can start to ask themselves whether it is time for an improvement in fortunes which will slowly start to re-build the economy. Until then we just have to wait.”

The Association of British Insurers’ 30-day target for transferring pension fund has been criticised by advisers.The Retirement Adviser director of retirement planning Nick Flynn said it was ridiculous that while some firms would guarantee a quote for an annuity for two or three weeks, the failure of other firms to transfer funds on time left those quotes redundant. “On one hand, you are offering 30 days to move the money and on the other, most insurers are promising people two or three week guarantees. You are promising the client something they cannot have because the rates are going to move,” he said.

One of the people with whom I work closely in an investment firm with which I have an association monitors a number of esoteric indicators that he believes give a good steer on economic activity. Included among these are the price of scrap metal and tanker demolition rates. These give, he feels, the best early signals of what is really going on in the global economy. After a prolonged weak period, they are both starting to tick up – volume of ships seeking demolition exceeds yard capacity to break them. That feels like a bottom.

Nicolas Just, Head of Smart Beta at Seeyond, says the most important point to recognise about the Seeyond approach to investing is that it sees volatility as an asset class and, with its factor-plus products, it aims to build portfolios that will outperform an index over one year/achieve outperformance as frequently as it can.

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22nd February 201912:00 pm

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